“Paradise Papers”: Indian-style tax evasion


The so-called “Paradise Papers” revealed once again how the rich and powerful hide their money. Hundreds of Indians saved their taxes. Murali Krishnan reports from New Delhi.

714 Indians are on the “Paradise Papers” list. India is the nineteenth country among 180 with the most number of individuals mentioned. Not only are there businessmen, but also politicians and their families, both from the governing party government and the opposition.

This has put on the table the fiscal problem in the third largest economy in Asia. The publication of the investigation just before the day against the black money of November 8 makes it particularly sensitive.

Exactly one year ago Prime Minister Modi quashed and removed the 500 and 1000 rupee bills to hit the silver. Now come the revelations about the tax evasion of hundreds of rich Indians.

For example, the document presents the name of Jayant Sinha, the Minister of State for Civil Aviation, who in turn is related to Omidyar Network, an investment company run by the American billionaire Pierre Omidyar, who calls himself a philanthropist.

Suspicion of conflicts of interest

The documents include offshore companies associated with the ruling BJP, as well as people from the opposition Congress Party.

The Congress Party now calls for the resignation of Sinha: “The documents of paradise raise serious doubts about a potential conflict of interest, the government should investigate the case,” said a party spokesman.

Before joining Parliament in 2014 and becoming Minister of State, Sinha served as head of the Omidyar Network in India. Omidyar invested in the US solar energy company D. Light Design, which has a subsidiary in the Cayman Islands. The documents of Appleby – one of the main actors in the framework that showed the “Paradise Papers” – show that Sinha was the director of D. Light Design. It was concealed from the electoral commission, also from the Secretariat of Parliament and the Office of the Prime Minister.

Sinha defends himself arguing that when he assumed the position of Minister of State, “immediately” resigned from the position of D. Light Design and ended the links with the company. “It should be noted that I made those transactions as a representative of Omidyar and not for personal purposes,” he added.

Not necessarily illegal

The documents of the Appleby law firms also show how millionaire loans were diverted through offshore subsidiaries of United Spirits Limited India.

The then owner of United Spirits was the largest beer and aviation entrepreneur, Vijay Mallya. Meanwhile, he fled to Britain to avoid reimbursing nearly a billion euros in loans he owes to Indian banks.

Relief does not stop even in the entertainment industry. For example, actor Amitabh Bachchan and Manyata Dutt, the wife of Bollywood star Sanjay Dutt, appear on the list. It is said that Manyata Dutt held various positions at a firm based in the Bahamas.

Experts say that if the name of an Indian person or company appears in a tax haven, that does not necessarily mean that laws have been violated. “It is too early to claim that it is illegal,” an employee of the Indian tax investigation, who asked to remain anonymous. “But what this research shows is the important role that tax havens have for Indian companies.”

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